Homeownership Capital Improvements

Permanently affordable homes have been constructed as complete and livable homes for households with limited, qualifying incomes and assets. As such, Capital Improvements for which credit at resale will be applied have been limited to ensure affordability for future homebuyers. The Town also wants to ensure that older affordable homes remain attractive; to accomplish this, a Capital Updates policy will be effective as of April 13, 2010.

This policy describes the Town of Davidson’s criteria for Eligible Capital Improvements and Capital Updates for permanently affordable housing units.

Eligible Capital Improvements
Eligible Capital Improvements will receive 50% credit of the approved cost and the approved cost may not exceed 10% of the purchase price.

Bedroom additions or completion of unfinished areas into living areas, not to include garages. Garages are allowed if the garage addition does not increase the resale price by more than 10 %

Modifications needed to accommodate a person with a “disability” as defined in the Americans with Disability Act of 1990, 42 USC Section 12101, et seq., or in a successor United States statute

Replace carpet with hardwood or tile floors

Improvements considered to be non-permanent or cosmetic are not eligible. Additionally, luxury and high end items chosen over standard items will only be eligible for capital improvements credits at the cost of the standard grade items.

In order to qualify as an Eligible Capital Improvement, it is mandatory that each proposed expenditure be approved in advance by the Town Manager. The process for receiving credit is listed in the “How to receive Credit” section.

Eligible Capital Updates
Eligible Capital Updates will receive 50% credit of the approved cost and the approved cost is not limited to 10% of the purchase price.

Permanent storage sheds that are built in accordance with approved plans and /or specifications and that are made of the same basic materials as the affordable home

If an item wears out prior to the determined life expectancy, contact the Affordable Housing staff at 704-940-9605, to request a written exception to this policy.

Updates considered to be non-permanent are not eligible. Additionally, luxury and high end items, such as granite or marble countertops, chosen over standard items will only be eligible for capital improvements credits at the cost of the standard grade items.

In order to qualify as an Eligible Capital Update, it is mandatory that each proposed expenditure be approved in advance by the Town Manager. The process for receiving credit is listed in the “How to receive Credit” section.

The Town has the right to refuse any improvement or update that would take the home out of the affordable range. This does not mean that you cannot improve or update your property, only that the improvement or update may not be included in the re-sale price.

How to Receive Credit for Capital Improvements & Capital Updates
To ensure the full allowed credit for Eligible Capital Improvements or Capital Updates, it is mandatory that each proposed expenditure be approved by the Town Manager or his designee prior to commencement of any work. Any completed Eligible Capital Improvements and/or Capital Updates submitted for credit without pre-approval are allowed credit for only fifty% (50%) of the eligible cost.

The process for requesting prior approval to ensure credit is:

Using the Capital Improvement/Capital Update form, submit a written request for approval of the proposed Capital Improvement or Update.

Include detailed plans and an itemized estimate of cost. Capital Improvements or Updates estimated to cost more than $5000, whether the work is to be done by the homeowner or a contractor, require the homeowner to submit bids from two licensed contractors. If the work is not being done by a contractor, the homeowner shall submit an itemized list of materials and the estimated costs. (Do not send originals, only copies).

After the pre-approval of a Capital Improvement or Update, if the scope of the work changes or if there are increases in costs, to ensure credit for the additional work and/or cost, the homeowner must request a modification of the pre-approval before starting the work and/or incurring the costs. The request should include the revised detailed plans and/or itemized cost estimate.

The Town Manager or his designee will review the proposal and approve eligible Capital Improvements or Updates within 14 days of receipt of a complete request.

Capital Improvements or Updates that have been approved must be completed within six months of approval or a new request for pre-approval will be required.

After an Eligible Capital Improvement or Update has been completed, within four weeks of completion of the work, the homeowner must submit to the Town an itemized receipt or bill of sale, complete with the contractor or supplier’s name, address, and phone number. The homeowner must submit a copy of the final inspection approval and building permit if one was required. (Do not send originals, only copies).

Within 14 days of receipt of the final Capital Improvement or Update request the Town will notify the homeowner in writing of the final amount of the credit.

All approved credits will be added to the maximum resale price immediately.

If the homeowner, the homeowner’s spouse, domestic partner, children or parents completes the improvement or update work, the homeowner will be credited only for the amount paid for eligible material per the provided itemized list. Receipts documenting the materials purchased must be submitted.

Remember that it may be necessary to obtain a permit for the work you intend to do. If you are building something new you should show your plans to the Town’s Planning Department. You may also need to contact Mecklenburg County Code Enforcement at 704-432-2520.

The Town shall have the right to inspect the property at times that are mutually convenient to the Town and the homeowner to confirm the Eligible Capital Improvements or Updates have been completed in a workmanlike manner and the reasonable value of the improvement. If the Town, in its reasonable discretion, is unsatisfied with the documentation provided by the homeowner, it may base its determination of the value of the improvements upon an estimate provided by an objective third party professional who is knowledgeable about local construction costs and practices. At the conclusion of this process, the Town will send a written statement of approved Capital Improvement or Capital Update credit to the homeowner.

Homeowners Association
Homeowners Association (HOA) dues are not an Eligible Capital Improvement or Update, however, eligible repairs or improvements made by the HOA to the affordable unit may be eligible for capital improvement or update credit. If the HOA pays for an improvement, such as a roof replacement for multiple townhouses, the total cost of the job may be prorated to determine the cost attributable to the roof over the affordable unit. A receipt with a written request must be submitted, as explained above, for review and approval.

Exception requests to this policy may be submitted to the Affordable Housing Staff of the Planning Department.